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Oil prices caught fire early in the summer, and the flames don't seem to be going out as fall approaches.

Investors started piling into the oil markets three months ago as tensions heightened between Israel and Iran, Europe's debt crisis appeared to make some progress toward resolution, and the Federal Reserve hinted that it might do more to stimulate the U.S. economy. U.S. crude futures have jumped 27% to $99 a barrel since the June 28 lows of $77.69. Europe's benchmark, Brent crude, has seen similar gains, up 28% to $116.70. Oil's gains also have eclipsed equities' gain, with the S&P 500 rising 10% since June 28.

Even though the U.S. central bank fulfilled the market's dreams with more easing last Thursday, analysts and investors say there's more than enough heat to stoke added oil gains.

A major reason is that the Middle East doesn't show any signs of settling down. Last week, Israel's Prime Minister Benjamin Netanyahu blasted the U.S. for not doing more to curb Iran's nuclear program. His statements followed weeks of increasingly hostile rhetoric from Israel and Iran that some fear could result in a military strike. Iran remains one of the world's largest oil exporters, even though its output has fallen from 3.7 million barrels a day to 2.7 million barrels since the U.S. and the European Union began ramping up sanctions in November. With nearly 20% of all oil shipments transported through the Persian Gulf's Strait of Hormuz, a military strike could prompt Iran to try to close this choke point.

"Unrest and protest are still spreading" in the region, according to a Credit Suisse report that noted that Middle East turmoil is the biggest risk to the oil supply. Just after the bank's warning last week, protests and attacks hit U.S. embassies in Libya, Egypt, Yemen. Sudan, and Tunisia.

In Libya, which produced 1.45 million barrels of oil a day in August, the murders of the U.S. ambassador and three other diplomats raised new fears of more crisis in a country where oil production is still recovering from last year's civil war.

Slow improvements in global economic growth are keeping fuel demand from slipping. The Fed's latest stimulus also offers hope that U.S. job growth will rise, putting more commuters on the roads and potentially spurring demand from airlines and the manufacturers. Recent European Central Bank moves have created more hope of growth there as well.

Of course, risks remain for investors betting on oil. The U.S. has indicated it may release oil from its strategic reserves if prices continue to rise, potentially putting a cap on gains. Last year, the release of 30 million barrels from U.S. reserves—due to uncertainty about supplies from war-torn Libya–briefly brought down prices.

Deutsche Bank analysts also have warned that "there is a major downside risk to the demand outlook" for oil due to the economic slowdown in China.

So far, however, hedge funds and other money managers have been undaunted. According to the latest data available, traders in that category have increased their bullish bets in Brent crude for seven straight weeks. The U.S. oil market, meanwhile, has seen four consecutive weeks of increases in bullish bets.

So as long as worries about a Middle East conflict simmer, higher oil prices don't need a new spark.